Military underprices tobacco more than law allows

Soldiers Anthony Kittle (R) and William Cameron both of Great Falls, Montana take a cigarette break along a blast wall at base Kalsu on July 17, 2011 in Iskandariya, Babil Province, Iraq. Members of the armed forces are one-and-a-half times more likely to smoke than civilians.

Tess Vigeland: Brown tobacco leaves are costing the military a lot of green.

The Department of Defense spends over $1.5 billion a year of taxpayer money on tobacco related expenses. Members of the armed forces are 1.5 times more likely to smoke than civilians.

But an investigation by reporter Sally Herships shows the military regularly fails to comply with its own tobacco pricing restrictions. It sells millions of dollars of cigarettes, cigars and chewing tobacco at prices lower than the law allows.

Sally Herships: Timothy Sterlachini is 40. He's got two kids and lives in Virginia. And he chews tobacco.

Herships: How long have you been chewing?

Timothy Sterlachini: For 14 years. I call it crack in a can.

Now, Sterlachini is a self-employed contractor, but he's been a Marine for 21 years. In 2003 he was a sergeant getting ready to drive into the Battle of Nasiriyah, one of the bloodiest in the Iraq War. About 75 feet away from him was a Humvee that had made out of Nasiriyah.

Sterlachini: Looked like they had taken five five-gallon buckets of blood and just thrown it all inside the vehicle and all around the vehicle.

Sterlachini was freaked out. He radioed his buddy, 12 vehicles back.

Sterlachini: Buckey Buckeye this is Zucchini, I need to speak to Echo Six Delta. And I was like Donahue make sure you take care of what you're supposed to take care of. Basically our pact was if either one of us didn't make it back that we were supposed to take care of each other's children.

To say being in the military is stressful would be an extreme understatement. According to the Department of Defense, service members say they use tobacco to relieve stress and boredom. Sterlachini says chewing-tobacco is especially popular with marines. But when it comes to cigarettes almost 40 percent of smokers in the military say they started after joining. Service members are one-and-half times more likely to smoke than civilians. It could be because they're
getting their tobacco so cheap. Tobacco sold on bases is supposed to be 5 percent cheaper than the lowest local price. But that's not what I found when I visited Fort Hamilton, in Brooklyn recently.

Fort Hamilton Ad: And from now through April 7th, when you use your Military Star Card on any Samsung appliance purchase of $499 or more...

New York has the highest excise tax in the country. So outside the base, a pack of Marlboro Reds sells for $11 or $12. That means the price inside should be around $10.50. But when I checked...

Herships: So how much are the Marlboro Reds?

Fort Hamilton clerk: $8.80

That's a 20 percent discount. Not the 5 percent required by the Department of Defense. When I first called Fort Hamilton in December packs were selling for nearly 50 percent off. I called over a hundred Army and Air Force bases, all over the country. And the civilian stores surrounding them. And I found unusually low discounts at bases in more than a dozen states.

Click on the image above to explore an interactive map of the bases that violate the military's tobacco pricing law. And read more about the research behind the map Read more

Keith Haddock was a Major in the Air Force. Now he studies tobacco's impact on the military at the National Development and Research Institute. Haddock says those big discounts on tobacco lead to big costs for taxpayers.

Keith Haddock: If you at all the costs they're pretty staggering. If you look at the direct medical costs, the indirect costs and the costs in pain and suffering -- it's substantial.

Take the Veteran's Administration. In 2008 the VA spent over $5 billion to treat chronic obstructive pulmonary disease. A condition which -- 80 percent of the time -- comes from smoking. But the most puzzling aspect of the military's discount on tobacco may be what Haddock says is its effect on what's called readiness: A troop's ability to be ready to go at a moment's
notice to fight and win wars. Which is really the whole point.

Haddock: If you just look at the things that smoking decreases, it decreases a military member's fitness, decreases fine motor coordination, stamina. It even decreases wound healing.

So why would the military discount something that makes its troops less effective? A lot of the service members I talked to, like Timothy Sterlachini, said when it's time for combat, tobacco helps reduce their stress. The brand of chewing tobacco Sterlachini uses is called Kodiak.

Herships: During this battle do you have Kodiak with you?

Sterlachini: Yes.

Herships: At what point does it go in your mouth?

Sterlachini: It never left.

Benjamin Gonzalez: The whole thing about stress relief and smoking is one big illusion.

Dr. Benjamin Gonzalez was in the Air Force and Army for 24 years. He was chief of the trauma center in Baghdad at the beginning of the Iraq War. Now he runs his own medical center in Maryland. Gonzalez says using tobacco only reduces the stress of addiction.

Gonzalez: In the same way that heroin alleviates stress in a heroin addict.

Gonzalez says smoking doesn't reduce stress. Instead, it causes it. He says he doesn't want to take away tobacco from anyone on the front line who needs their fix. But it would be worthwhile to keep them from picking up a can of chew or pack of cigarettes in the first place. Gonzalez says the relationship between pricing and tobacco use is well documented.

Gonzalez: If it's cheaper, they're going to smoke more. Period.

The more cigarettes smoked, the higher the cost, the larger the bill to the taxpayer and the greater the number of sick service members. Which brings us back to the issue of tobacco pricing on military bases.

Lt. Col. Shrader works for the Army and Air Force Exchange Service.

Herships: How does the military set prices for tobacco?

Lt. Col. Tom Shrader: OK. What we do is we have local market pricing coordinators.

The pricing coordinators Shrader's talking about are the people whose job it is to help set prices for tobacco at the bases.

Shrader: We look at gas stations, we look at convenience stores, we look at major retailers.

Which is what they're supposed to do. But it turns out they also look at stores on other military bases. That would mean say, the Army, taking a tobacco price from the Coast Guard, which is already discounted and discounting on top of that. So I asked Shrader: Is this going to change? But I never could get a straight answer.

Shrader: The Coast Guard exchange prices have been reviewed and at those co-located areas in the past we are now working cooperatively with all co-located exchange services to ensure that our pricing is using the same commercial competitors that they are.

I asked six different times if the Army and Air Force would stop using other bases to set prices, but I got the same evasive response each time. Which was basically the answer to a whole different question.

I did manage to find out one thing: One of the reasons prices at the base in Brooklyn are so cheap is because they've been set based on prices at a so-called local store, which is five hours away at an Indian Reservation in Oneida, N.Y. Some other bases set prices the same way, but Shrader says the Army and Air Force Exchange has recently decided this isn't a good system. And prices at the base in Brooklyn are on their way up. And that could mean better health for our military and a smaller tax bill for everyone.